Helloworld chief made $200,000 donation to Liberal Party during government tender

A private company co-owned by the Liberal Party’s federal treasurer donated $200,000 two weeks into a government tender process for an accommodation contract worth nearly $1 billion that another of his companies ultimately won.

Donations experts said the 2016 gift from Helloworld Travel chief executive Andrew Burnes created a perceived conflict of interest that raised serious concerns about oversight of political fundraising.

Liberal Party federal treasurer Andrew Burnes.Credit:AAP

Mr Burnes' private company - Burnewang Pastoral Company - followed the $200,000 donation by paying $120,000 for tickets to a Liberal dinner held in 2017 when contract negotiations remained under way. The money was treated as an attendance payment rather than a donation.

The businessman and the party say his contributions are unremarkable for a treasurer.

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"It is no secret that Andrew Burnes is a passionate and long-time financial supporter of the Liberal Party," his spokesman said.

"He became federal treasurer of the Liberal Party in 2015 and increased his donations the following year to lead by example.

"All of his donations have been publicly and properly reported. He has never sought nor received any benefit for his donations. He donates to support the democratic political process in Australia."

On December 1, 2016, the Finance Department released a request for tender for a three-year accommodation package that would serve thousands of government employees travelling for work.

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Mr Burnes' AOT Group, which merged with Helloworld in 2016, was the existing contractor having won a tender under Labor in 2012.

On December 19, 2016, 18 days after the tender period opened, Burnewang donated $200,000 to the Liberal Party.

The sum established Burnewang, co-owned by Mr Burnes, as the fourth largest political donor in Australia that year, excluding unions and fundraising bodies.

The donation followed Burnewang’s previous gift of $100,000 the financial year before.

A month and a half after the $200,000 donation, the request for tender period closed. AOT was announced as the successful tenderer in August, several weeks after Mr Cormann received the flight bookings.

Burnewang’s donations exceed the total money AOT Group has donated to the Liberals since 2000.

In its 2016-2017 declaration to the Australian Electoral Commission, Burnewang’s donation was recorded by its "GM finance" Kerrie Maher, also an accountant for AOT.

"There's at the very least a perceived conflict of interest when a business bidding for a government contract makes a sizeable political contribution to the party in government," University of Melbourne law professor Joo-Cheong Tham said.

"That perception would also exist when it comes to contributions made by individuals who would be key beneficiaries of those government contracts."

Professor Tham said the donation’s timing strengthened the perception of a conflict. The same perception was weakened because the department, not a politician, made the contract decision, he said.

Graeme Orr.

University of Queensland law professor Graeme Orr also said the donation created a perceived conflict of interest.

"It raises questions about the purpose or motive of such a large donation but it raises bigger questions about why we have a national system that has no caps on donations and no ICAC-style investigative body," Professor Orr said.

A Liberal Party spokesman said the party fully complied with donations laws.

"The fact that the Liberal Party’s honorary federal treasurer contributes to the party is completely unremarkable and is consistent with the long tradition of successful business leaders who have supported the party in that role," the spokesman said.

Mr Cormann has said previously he played "absolutely no role" in choosing Mr Burnes’ company as the contract winner.

However, Mr Burnes rang Mr Cormann before the tender result had been announced to complain about what Mr Cormann called the "robustness" of the process.

Mr Cormann said in Senate estimates he believed the call came after negotiations were settled on June 28, and that he directed Mr Burnes to call the department instead.

The minister told estimates he was unaware how much money Mr Burnes had donated over the years and offered to provide "a list of businesses who have profitably secured business having made donations to the offices of the Labor Party".

A Finance Department spokeswoman said there was no involvement in the open tender process - which attracted four submissions - by the minister, his office, or any other MP.

The spokeswoman also said "it would breach the Commonwealth Procurement Rules to exclude a business from participating in a procurement based on the political affiliations of one or more of the shareholders or office holders of that business".

Mr Burnes declined to answer questions about a $120,000 contribution to the Liberal Party he made through Burnewang by buying tickets to the party’s federal council gala dinner, held on June 23, 2017.

The Liberal Party classed it as an "other receipt", rather than as a donation.

"Classification of payments is consistent with the approach of other parties," a party spokesman said.

"Burnewang Pastoral received nothing in return beyond attendance at the event."

Fundraiser tickets purchased with the intention of contributing to a party should be classified as donations, according to AEC guidelines. But the AEC states that classification remains a decision for the contributor.

Lindy Edwards, a UNSW senior lecturer, said the $120,000 "looks like a prime example of everything that's wrong with the current system of classifying other receipts".

In Queensland, any amount above $200 paid for a fundraiser may be considered a donation.

Timeline

June 2015 Andrew Burnes named as new federal treasurer of the Liberal Party. Donates $100,000 through Burnewang Pastoral Company the next financial year.

December 1, 2016 Request for tender opens for contract held at the time by Burnes’ AOT Group.